Asheville City Council Suspends Consideration of Land Use Incentive Grants for Micro-Apartments - TribPapers

Asheville City Council Suspends Consideration of Land Use Incentive Grants for Micro-Apartments

David Moritz wants to develop micro-apartments in Asheville, but he says it would be difficult without subsidy. Screenshot.

Asheville – Asheville City Council unanimously voted to suspend the consideration of awards for Land Use Incentive Grants (LUIGs) for micro-apartments until policies regulating the land use can be established. Micro-apartments, which are residential units smaller than 400 square feet, have gained popularity as a response to the housing crisis in areas where housing is expensive and hard to find.

Reviewing LUIG Policy and Background

In February, Asheville’s Housing and Community Development Committee (HCD) requested the Affordable Housing Advisory Committee (AHAC) to review how the Land Use Incentive Grant (LUIG) policy should apply to micro-apartments. AHAC recommended terminating the consideration of LUIGs for micro-apartment developers until a complete reworking of the LUIG policy. The HCD and city staff supported this decision.

The LUIG policy, which has undergone six revisions since its introduction in 2010, only awarded its first grants in 2015. Developers had faced challenges in securing bank financing due to the required level of losses for grant eligibility. The city engaged developers in discussions to develop viable plans, leading to increased developer participation. However, many developers encountered difficulties in fulfilling their project commitments, necessitating further changes.

Concerns and Recommendations

Affordable Housing Officer Sasha Vrtunski highlighted that micro-apartments are not included in the city’s document, known as “Appendix 1,” which outlines qualifying rents for various types of affordable housing units. AHAC identified additional concerns in May, including the affordability of micro-apartments, questioning the need for subsidies. Some committee members supported scaled-down subsidies for micro-apartments. There were also concerns about whether the smaller unit size and shared common kitchen concept align with the needs of those seeking affordable housing. Vrtunski confirmed that micro-apartments would qualify for voucher programs after staff verification.

AHAC’s Motion and Project Under Review

AHAC unanimously approved a motion to either suspend consideration of LUIG grants for micro-apartment development or require developers to address all committee concerns and allocate 50% of the affordable units for voucher holders. The HCD unanimously supported the recommendation to suspend consideration but decided to review an application for micro-housing at their next meeting.

The reviewed project, located on Aston Street, aims to offer 47 out of 231 units as affordable housing and triggered the policy review. This project will be exempt from the suspension and will undergo the design review process, concluding with a public hearing before the city council on July 25.

Updating the Affordable Housing Plan

Starting in August, city staff will engage in a four-month endeavor to update Asheville’s affordable housing plan. The inclusion of consultants will help prioritize projects to maximize the utilization of limited resources for housing subsidies.

Perspectives and Public Comment

Councilwoman Kim Roney expressed appreciation for the LUIG program as an alternative to rent control, which is not legal in North Carolina. Councilwoman Sage Turner supported a study by city staff to assess the market demand for micro-apartments before developers undertake risks. Councilwoman Maggie Ullman acknowledged the value of private sector experimentation while emphasizing the government’s role in nurturing such initiatives.

During the public comment period, developer David Moritz revealed that he was the sole person who had formally submitted proposals for micro-apartments in Asheville. He had already received a LUIG grant for another micro-apartment project. While he supported further study, Moritz shared successful examples of micro-apartment projects in Seattle and Nashville, emphasizing their popularity despite higher costs due to prime real estate locations and doubled construction expenses.


– “You’ll get the chance to see crayfish, mussels, aquatic snails, salamanders, aquatic insects, and fish you don’t normally see, even if you fish.” – Luke Etchison, Ph.D., Western Region Aquatic Wildlife Diversity Coordinator, Wildlife Commission’s Inland Fisheries Division

– “Some on the committee could support subsidies for micro-apartments, but only if they were scaled down.” – Sasha Vrtunski, Affordable Housing Officer

– “Risk from the private sector could be a good thing, but it was important for the government to nurture certain experiments.” – Councilwoman Maggie Ullman

– “While these tiny apartments are naturally affordable, they’re still expensive because they are constructed on prime real estate in central business districts, and construction costs have doubled since this project’s inception.” – Developer David Moritz